Chinese officials appear to have retreated from their controversial plan to install an internet filtering system on computers in the country.

The industry and information technology minister, Li Yizhong, said today that the notion that the Green Dam programme would be required on every new computer was “a misunderstanding” spawned by poorly written regulations.

He said all public computers in schools and internet cafes must install the software – but the government “respected the choice of individuals who do not install it”. He said: “Those who overstated and politicised the issue, or even attacked China’s internet regulation, are irresponsible,” and added that pornography was the main target of the software.

Its initial plans met with fierce opposition when they were announced, with many internet users fearing that the software – which blocks pornographic, violent and politically sensitive content – would also be used to monitor behaviour, curb access to information and track users.

At first it appeared that the campaign, which was backed by the US government, was gaining ground. However last month, hours before the programme was due to be implemented, officials briefed that there would be a delay, but the plans would eventually go ahead.

Today’s announcement appears to make that suspension permanent, with Li saying the government would neither require the programme to come pre-installed on new computers, nor force computer makers to include the programme on a CD with optional software.

Palm Pre users watch out. Palm may know a lot more about you than you would like to share.

Programmer Joey Hess found that Palm Pre’s operating system webOS sends his GPS location back to Palm every day. Hess also found code that sends Palm data on which webOS apps he has used each day, and for how long he used each one.

“I was surprised by this,” Hess, who bought the Pre about a month ago, told Wired.com. “I had location services turned off though I had GPS still on because I wanted it to geotag photos. Still I didn’t expect Palm to collect this level of information.”

In its defense, Palm says the data is used to offer better results to users. For instance, when location-based services are used, the Pre collects information to give users relevant local results in Google Maps, says Palm.

“Palm takes privacy very seriously and offers users ways to turn data collecting services on and off,” says Palm in a statement. “Our privacy policy is like many policies in the industry and includes very detailed language about potential scenarios in which we might use a customer’s information, all toward a goal of offering a great user experience.”

Palm’s actions trigger questions about consumer privacy and the extent to which handset makers and developers are gathering and using data about buyers’ behavior.

A controversial service which allows connection to millions of mobile phone numbers in an online directory has been suspended, just weeks after it was launched.

The 118 800 service, which charges up to £1 to put people in touch with a mobile number from its list, went live in June. Since then it has been deluged with people trying to remove their details from the system.

The site had caused concerns about privacy after it emerged it was making available details of 15m mobile phone numbers it had bought from market researchers and list brokers.

Consumers who wanted their numbers removed from the site were told they needed to log on and apply to be ex-directory.

Those who tried to do so late last week were unable to access the site. Visitors are now told the service is unavailable online and by phone while “major developments” are undertaken “to improve the experience for our customers”.

The message says: “All ex-directory requests made by people in our directory to date are being processed. There will be no need to resend these requests.”

Shares in the online ad firm Phorm have fallen by more than 40% after BT said it had no immediate plans to use the service that tracks online behaviour. The firm’s shares were down 43.16% at 270p at 13:13 BST.

Phorm serves up adverts related to a user’s web browsing history, which it monitors by taking a copy of the places they go and search terms they look for. However, it came in for considerable criticism from privacy groups and prompted an EU investigation.

Phorm builds a profile of users by scanning for keywords on websites visited and then assigns relevant ads. It has proved controversial because it scans almost all sites a user visits and there is an ongoing political debate about how a user gives consent.

Phorm had conducted trials of its technology with BT, which it marketed as Webwise. A spokesman for British Telecom, Mike Jarvis, told the BBC that they were not completely closing the door on Phorm’s Webwise service.

In April, Amazon blocked Phorm from scanning its web pages to produce targeted advertising, as has the UK government, citing privacy concerns.

Phorm declined an interview request, instead issuing a statement saying its activities “remain ongoing” and that it was looking forward ” to creating the conditions necessary for UK ISPs to move to deployment”.

Sensitive information for shooting down intercontinental missiles as well as bank details and NHS records was found on old computers, researchers say.

Of 300 hard disks bought randomly at computer fairs and an online auction site, 34% still held personal data. Researchers from BT and the University of Glamorgan bought disks from the UK, America, Germany, France and Australia.

The information was enough to expose individuals and firms to fraud and identity theft, said the researchers. Professor Andrew Blyth said: “It’s not rocket science – we used standard tools to analyse the data”.

The research involving the Welsh campus was led by BT’s Security Research Centre and included researchers at Edith Cowan University in Australia and Longwood University in the US.

In addition to finding bank account details and medical records, the work unearthed job descriptions and personal identity numbers as well as data about a proposed $50bn currency exchange through Spain.

The UK’s electronic intelligence agency has taken the unusual step of issuing a statement to deny it will track all UK internet and online phone use.

Government Communications Headquarters (GCHQ) said it was developing tracking technology but “only acts when it is necessary” and “does not spy at will”.

The denial follows the home secretary scrapping plans for a single government database for all communications. Jacqui Smith said instead firms should record all people’s internet contacts.

In the statement, GCHQ said one of its “greatest challenges is maintaining our capability in the face of the growth in internet-based communications. We must reinvest continuously to keep up with the methods that are used by those who threaten the UK and its interests.”

But the agency added: “GCHQ is not developing technology to enable the monitoring of all internet use and phone calls in Britain, or to target everyone in the UK. Similarly, GCHQ has no ambitions, expectations or plans for a database or databases to store centrally all communications data in Britain.”

Greater use of social network sites is making it harder to maintain true anonymity, suggests research. By analysing links between users of social sites, researchers were able to identify many people in supposedly anonymous data sets.

The data is produced by sites who sell it to marketing firms to generate cash.

The results suggest web firms should do more to protect users’ privacy, said the researchers.

Computer scientists Arvind Narayanan and Dr Vitaly Shmatikov, from the University of Texas at Austin, developed the algorithm which turned the anonymous data back into names and addresses.

The data sets are usually stripped of personally identifiable information, such as names, before it is sold to marketing companies or researchers keen to plumb it for useful information.